RumbleOn, Inc. - FORM 10-K/A - March 30, 2018

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EX-32.2 - CERTIFICATE PURSUANT TO SECTION 18 U.S.C. PURSUANT TO SECTION 906 OF THE SARBANE - RumbleOn, Inc.rmbl_ex322.htm
EX-32.1 - CERTIFICATE PURSUANT TO SECTION 18 U.S.C. PURSUANT TO SECTION 906 OF THE SARBANE - RumbleOn, Inc.rmbl_ex321.htm
EX-31.2 - CERTIFICATION PURSUANT TO RULE 13A-14(A)/15D-14(A) CERTIFICATIONS SECTION 302 OF - RumbleOn, Inc.rmbl_ex312.htm
EX-31.1 - CERTIFICATION PURSUANT TO RULE 13A-14(A)/15D-14(A) CERTIFICATIONS SECTION 302 OF - RumbleOn, Inc.rmbl_ex311.htm
 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Form 10-K/A
Amendment No. 1
 
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the fiscal year ended December 31, 2017
 
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
Commission file number 001-38248
 
RumbleOn, Inc.
(Exact name of registrant as specified in its charter)
 
Nevada
 
46-3951329
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
 
  
4521 Sharon Road, Suite 370,
Charlotte, North Carolina 28211
 
 
(Address of principal executive offices)
 
 
(704) 448-5240
(Registrant’s telephone number, including area code)
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Name of exchange on which registered
Common Stock, $0.001 par value
 
The Nasdaq Stock Market LLC
 
Securities registered pursuant to Section 12(g) of the Act:
None
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
 
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐
 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐
 
Indicate by check mark whether the registrant a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer
☐
Accelerated filer
☐
Non-accelerated filer
☐ (Do not check if a smaller reporting company)
Smaller reporting company
☒
 
 
Emerging growth company
☒
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
 
As of June 30, 2017, the aggregate market value of shares of common stock held by non-affiliates of the registrant was approximately $18.0 million.
 
The number of shares of Class B Common Stock, $0.001 par value, outstanding on February 23, 2018 was 11,928,541 shares. In addition, 1,000,000 shares of Class A Common Stock, $0.001 par value, were outstanding on February 23, 2018.

 
 
RUMBLEON, INC.
 
TABLE OF CONTENTS TO ANNUAL REPORT ON FORM 10-K/A
FOR THE YEAR ENDED DECEMBER 31, 2017
 
PART III
Item 11.
Executive Compensation
1
PART IV
Item 15.
Exhibits, Financial Statement Schedules
2
 
 
 
 
 
 
EXPLANATORY NOTE
 
This Annual Report on Form 10-K/A is being filed by RumbleOn, Inc. (the "Company") to amend the Annual Report on Form 10-K for the year ended December 31, 2017, filed by the Company with the Securities and Exchange Commission (the "SEC") on February 27, 2018 (the “Original Filing”) to (i) amend Part III, Item 11 to include certain executive compensation information omitted from the Original Filing and (ii) to include the certifications required to be filed with this amendment. Except as set forth in the immediately preceding sentence, this amendment does not amend, modify or update any disclosures contained in the Original Filing. Nothing contained in this amendment updates any disclosure contained in the Original Filing to reflect any events occurring after the filing of the Original Filing.
 
 
 
 
PART III
 
Item 11.
Executive Compensation.
 
Executive and Director Compensation
 
Summary Compensation Table
 
The following table provides the compensation paid to our principal executive officer and other executive officers whose total compensation exceeded $100,000 for the year ended December 31, 2017. No compensation was earned or paid to our executive officers during the year ended December 31, 2016.
 
Name and Principal Position
 
Fiscal Year
 
Salary(1)
 
 
Bonus
 
 
Stock Awards
($)
 
 
Option Awards ($)
 
 
All Other
Compensation
 
 
Total
 
Marshall Chesrown
 
2017
 $215,385 
  - 
  - 
  - 
  - 
 $215,385 
Chief Executive Officer
 
 
    
    
    
    
    
    
 
 
    
    
    
    
    
    
Steven R. Berrard
 
2017
 $215,385 
  - 
  - 
  - 
  - 
 $215,385 
Chief Financial Officer
 
 
    
    
    
    
    
    
____________
(1) This compensation was paid in a single lump sum during the fourth quarter of 2017.
 
Executive Employment Arrangements
 
Marshall Chesrown
 
We have not entered into an employment agreement or arrangement with Mr. Chesrown. Accordingly, he is employed as our Chief Executive Officer on an at-will basis. Mr. Chesrown currently receives an annual salary of $240,000, which is paid weekly, in accordance with our standard payroll practice.
 
Mr. Chesrown is eligible for equity compensation under our equity compensation plans, as determined from time to time by the compensation committee of our Board, however through the date of this filing, no grants of equity awards have been made to Mr. Chesrown.
 
Steven Berrard
 
We have not entered into an employment agreement or arrangement with Mr. Berrard. Accordingly, he is employed as our Chief Financial Officer on an at-will basis. Mr. Berrard currently receives an annual salary of $240,000, which is paid weekly, in accordance with our standard payroll practice.
 
Mr. Berrard is eligible for equity compensation under our equity compensation plans, as determined from time to time by the compensation committee of our Board, however through the date of this filing, no grants of equity awards have been made to Mr. Berrard.
 
Non-Employee Director Compensation
 
We have not yet established a policy for non-employee director compensation. As of December 31, 2017, no compensation had been paid to our non-employee directors, except (i) consulting fees paid to our director Kartik Kakarala under the terms of a consulting agreement with us, which we further describe under “Certain Relationships and Related Party Transactions - Consulting Agreement” and (ii) an award of 35,000 restricted stock units under the RumbleOn, Inc. 2017 Stock Incentive Plan (the “Incentive Plan”) to Messrs. Dixon, Pierce, Westfall and Gray.
 
 
1
 
The following table summarizes the compensation paid to our non-employee directors for the year ended December 31, 2017.
 
Name
 
Fees Earned or Paid in Cash
 
 
Stock Awards (1)(2)
 
 
All Other Compensation
 
 
Total
 
Denmar Dixon
  - 
 $122,500 
 $- 
 $122,500 
Kartik Kakarala
  - 
 $- 
 $40,000 
 $40,000(3)
Mitch Pierce
  - 
 $122,500 
 $- 
 $122,500 
Kevin Westfall
  - 
 $122,500 
 $- 
 $122,500 
Richard A. Gray, Jr.
  - 
 $188,300 
 $- 
 $188,300 
____________
(1) 
Represents restricted stock units granted under the Incentive Plan. Represents the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. In determining the grant date fair value, we used $3.50 per share except for Mr. Gray for which we used $5.38 per share. The restricted stock units vest over a three-year period utilizing the following vesting schedule: (i) 20% on the first anniversary of the grant date; (ii) 30% on the second anniversary of the grant date; and (iii) 50% on the third anniversary of the grant date.
 
(2)
As of December 31, 2017, each of Messrs. Dixon, Pierce, Westfall and Gray held 35,000 restricted stock units.
 
(3)
Represents consulting fees paid to Mr. Kakarala pursuant to the consulting agreement. For additional information regarding these consulting fees, see Certain Relationships and Related Transactions - Consulting Agreement under Part III, Item 13.
 
PART IV
 
Item 15.  
Exhibits, Financial Statement Schedules.
 
(a)          
We have filed the following documents as part of this Annual Report on Form 10-K:
 
1. 
The financial statements listed in the “Index to Financial Statements” on page F-1 are filed as part of this report.
2. 
Financial statement schedules are omitted because they are not applicable, or the required information is shown in the financial statements or notes thereto.
3. 
Exhibits included or incorporated herein: See below.
 
Exhibit Number
 
Description
 
Asset Purchase Agreement, dated as of January 8, 2017 (Incorporated by reference to Exhibit 2.1 in the Company’s Current Report on Form 8-K, filed on January 9, 2017).
 
Assignment of Asset Purchase Agreement, dated as of January 31, 2017 (Incorporated by reference to Exhibit 2.2 in the Company’s Annual Report on Form 10-K, filed on February 14, 2017).
 
Articles of Incorporation filed on October 24, 2013 (Incorporated by reference to Exhibit 3(i)(a) in the Company’s Registration Statement on Form S-1/A, filed on March 20, 2014).
 
By-Laws, as Amended (Incorporated by reference to Exhibit 3.2 in the Company’s Annual Report on Form 10-K, filed on February 14, 2017).
 
Certificate of Amendment to Articles of Incorporation, filed on February 13, 2017 (Incorporated by reference to Exhibit 3.3 in the Company’s Annual Report on Form 10-K, filed on February 14, 2017).
 
Amended and Restated Stockholders Agreement, dated February 8, 2017 (Incorporated by reference to Exhibit 10.1 in the Company’s Annual Report on Form 10-K, filed on February 14, 2017).
 
Registration Rights Agreement, dated February 8, 2017 (Incorporated by reference to Exhibit 10.2 in the Company’s Annual Report on Form 10-K, filed on February 14, 2017).
 
Stockholder’s Agreement, dated October 24, 2016 (Incorporated by reference to Exhibit 10.1 in the Company’s Current Report on Form 8-K, filed on October 28, 2016).
 
Sample Stock Certificate – Class B Common Stock (Incorporated by reference to Exhibit 4.4 in the Company’s Registration Statement on Form S-1/A filed on September 27, 2017).
 
Form of Warrant to Purchase Class B Common Stock, dated October 18, 2017 (Incorporated by reference to Exhibit 4.1 in the Company’s Current Report on Form 8-K, filed October 24, 2017).
 
Consulting Agreement, dated February 8, 2017 (Incorporated by reference to Exhibit 10.3 in the Company’s Annual Report on Form 10-K, filed on February 14, 2017).
 
 
2
 
 
 
Services Agreement, dated February 8, 2017 (Portions of this Exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for Confidential treatment) (Incorporated by reference to Exhibit 10.4 in the Company’s Annual Report on Form 10-K, filed on February 14, 2017).
 
Data Confidentiality Agreement, dated February 8, 2017 (Portions of this Exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment.) (Incorporated by reference to Exhibit 10.5 in the Company’s Annual Report on Form 10-K, filed on February 14, 2017).
 
2017 RumbleOn, Inc. Stock Incentive Plan + (Incorporated by reference to Exhibit 10.1 in the Company’s Current Report on Form 8-K, filed on January 9, 2017).
 
Form of Loan Agreement (Incorporated by reference to Exhibit 10.1 in the Company’s Current Report on Form 8-K, filed on December 21, 2016).
 
Smart Server, Inc. Form of Promissory Note (Incorporated by reference to Exhibit 10.2 in the Company’s Current Report on Form 8-K, filed on December 21, 2016).
 
Promissory Note, dated July 13, 2016 (Incorporated by reference to Exhibit 10.1 in the Company’s Current Report on Form 8-K, filed on July 19, 2016).
 
Amendment to Promissory Note, dated August 31, 2016 (Incorporated by reference to Exhibit 10.11 in the Company’s Annual Report on Form 10-K, filed on February 14, 2017).
 
Unconditional Guaranty Agreement (Incorporated by reference to Exhibit 10.12 in the Company’s Annual Report on Form 10-K, filed on February 14, 2017).
 
Security Agreement (Incorporated by reference to Exhibit 10.13 the Company’s Annual Report on Form 10-K, filed on February 14, 2017).
 
NextGen Promissory Note, dated February 8, 2017 (Incorporated by reference to Exhibit 10.1 in the Company’s Quarterly Report on Form 10-Q, filed on May 15, 2017).
 
RumbleOn, Inc. Form of Promissory Note (Incorporated by reference to Exhibit 10.1 in the Company’s Current Report on Form 8-K, filed on April 5, 2017).
 
Amendment to Amended and Restated Stockholders’ Agreement of RumbleOn, Inc., dated September 29, 2017 (Incorporated by reference to Exhibit 10.1 in the Company’s Current Report on Form 8-K, filed on October 5, 2017).
 
Form of Senior Secured Promissory Note, dated September 5, 2017 (Incorporated by reference to Exhibit 10.1 in the Company’s Current Report on Form 8-K, filed on September 11, 2017).
 
Demand Promissory Note and Loan and Security Agreement, in favor of NextGear Capital, Inc., dated November 2, 2017 (Incorporated by reference to Exhibit 10.1 in the Company’s Current Report on Form 8-K, filed November 8, 2017).
 
Corporate Guaranty, in favor of NextGear Capital, Inc., dated November 2, 2017. (Included in Exhibit 10.15)
21.1***
 
Subsidiaries
23.1***
 
Consent of Scharf Pera & Co., PLLC.
 
Certification pursuant to Section 302 of the Sarbanes-Oxley Act
 
Certification pursuant to Section 302 of the Sarbanes-Oxley Act
32.1**
 
Certification pursuant to Section 906 of the Sarbanes-Oxley Act
32.2**
 
Certification pursuant to Section 906 of the Sarbanes-Oxley Act
101.INS***
 
XBRL Instance Document.
101.SCG***
 
XBRL Taxonomy Extension Schema.
101.CAL***
 
XBRL Taxonomy Extension Calculation Linkbase.
101.DEF***
 
XBRL Taxonomy Extension Definition Linkbase.
101.LAB***
 
XBRL Taxonomy Extension Label Linkbase.
101.PRE***
 
XBRL Taxonomy Extension Presentation Linkbase.
 
*
 
Filed herewith.
**
 
Furnished herewith
***
 
Previously filed with the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 and filed with the Securities and Exchange Commission on February 27, 2018.
+
 
Management Compensatory Plan
 
 
 
 
 
 
3
 
 
SIGNATURES
 
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
RumbleOn, Inc.
 
 
 
 
 
Date: March 30, 2018
By:  
/s/ Steven R. Berrard
 
 
 
Steven R. Berrard
Chief Financial Officer
(Principal Financial and Accounting Officer)
 
 
 
 
 
 
 
 
 
4

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